1) Spend Analysis : The first step towards unlocking Procurement benefits is to get comprehensive visibility of the spend. Typically, the quality of spend data at portfolio companies is below par, is spread across multiple systems and is unsatisfactorily categorized. A spend analysis program can help harmonize categories and taxonomies across portfolio companies and allow the management to get a holistic view of the aggregate spend. Subsequently this data can be used to derive actionable business insights, uncover hidden savings opportunities and direct the overall Procurement strategy for the PE firm.
2) Portfolio-wide Spend Aggregation and Formulation of Procurement Strategy: Valorant works closely with the leadership of all portfolio companies to identify spend areas which can be sourced collectively. Typically, categories such as Travel, Office Supplies, IT Telecom, Car Rental etc. can often be easily aggregated. The aggregated spend can then be sourced by implementing the most suitable strategies including:
Suppliers can sometimes be reluctant to work in a cross-portfolio environment due to concerns around ownership stakes and the extent of the PE firm’s influence on company management. Valorant is experienced in drafting and negotiating equitable terms in the contract to assure fair deal for suppliers even as the PE firm continues to add new investments to the portfolio as well as make exits.
3) Opportunity Assessment and Implementation for Portfolio companies: Our team of consultants are experienced in applying strategic Procurement principles to companies of all sizes. We work with individual portfolio companies to identify savings opportunities through spend analysis, contract analysis and stakeholder interviews. We understand that time is critical for all PE investments and follow an expedited approach for opportunity identification and execution. After a quick opportunity assessment, our team launches a rapid sourcing program wherein high value contracts are renegotiated and spend is consolidated to key suppliers to achieve quick bottom-line savings. Additionally, to capture incremental value, market bidding (RFP) and demand management projects for pertinent categories are launched simultaneously to get competitive rates, optimize consumption and gain additional leverage on incumbent suppliers. A $400MM PE-owned insurance company achieved 7% savings on their third party spend in just 6 months with Valorant.
4) Pre-Deal Due Diligence: Often, Procurement efficiencies are a major rationale for the deal and accurate savings potential is critical to ascertain fair valuation. We work with both buy side and sell side PE firms to identify Procurement savings in an accelerated timeline which is critical for such transactions. In case the deal goes through successfully, we also work with the buyer to execute savings opportunities to capture value quickly.
5) Mergers, Acquisitions and Carve Out Support: We work with private equity companies to realize Procurement benefits during the integration phase of an M&A transaction. Our team understands the importance of time and follows a rapid sourcing methodology to quickly deliver savings to help our clients meet all their savings goals based on 100 day, 6 months and 1-year plans. In the case of carve-outs, where a client buys a business unit from a larger company, we help our clients in setting up a best-in-class Procurement function at the standalone firm which is functional from Day 1 to maximize value capture potential